Faithful Daughter (FD) is in her 40s and is the only child of her 84-year-old mother, Aging Mom (AM). AM lives in another state, far from FD. Their relationship can be difficult as AM is stubborn and likes to have her way always. FD always feels a sense of responsibility for AM, as she has no one to really look out for her, living alone. AM has wealth, but it won’t last until the end of her days unless she stops her reckless and apparently mindless spending habits. Can FD do anything about this problem?
Talking To Mom Doesn’t Work
FD has wisely gained access to AM’s bank and financial statements. She is the appointed person on AM’s Durable Power of Attorney. She sees what is going on and is increasingly alarmed. She gets on a plane and visits AM on a fairly regular basis. On her visits, she shows her mom the financial statements and explains how dangerous it is to keep making all those donations and sending money to various organizations every week. AM nods and listens for a bit, but nothing changes. The next financial statement shows even more reckless spending, beyond any reasonable or generous budget. AM seems to forget everything FD told her. There are other signs of memory loss with AM as well.
The Financial Manager Does Little To Stop The Excessive Withdrawals
Before this growing problem came up, AM had been with the same financial managers as FD. Things were stable then, but AM is impulsive and can be volatile. She decided to change financial managers. The new folks heard all about FD’s concerns that her mom might run out of money right when she could need long term care at home, a costly prospect. The new financial folks agreed that AM was spending far too much. They talked to AM with the same result her daughter got: nothing changed. At one point, the financial managers made the ridiculous suggestion that AM could look at her spending anytime using an app. At her age, being hesitant about technology in general, that was never going to happen. What was FD to do?
Getting An Estate Planning Attorney
FD, with guidance from us at AgingParents.com, got a new estate planning attorney near AM’s home. Her old attorney who drafted the trust years prior had passed away. We had found and vetted the new lawyer in advance and it seemed to be a good fit. AM agreed to go with FD to meet the new attorney in person. The meeting went well. A first step was to get AM to agree that she would appoint her daughter to be her co-trustee. That did not solve the problem completely, as AM was still also a trustee and both had to agree before certain things could be done. FD could gain more access to financial information as co-trustee. But, the over spending went on.
The Healthcare Piece
We also guided FD to get a twice a week home care worker to help keep things in order at home and to report any health changes to the worker’s supervisor, an RN. That was also helpful, as the nurse reported to FD as AM’s memory problem grew worse over time. Finally, the nurse visited AM and reported to FD that due to memory loss, she could not keep track of her bills at all, nor her spending. That link between the health care worker, the RN and FD was a very useful one. FD knew the point when it was time to take over control completely with her mom’s finances.
Would Mom Ever Give Up Control?
FD arranged a trip to see her mother. She set up an in-person visit with the estate planning lawyer and AM and FD went to see her together. The lawyer kindly explained to AM, privately and outside FD’s presence, that she needed to be safe with money and her daughter was the only one to turn to now. It was time for AM to give up being a co-trustee. AM had to think about this, and shed a few tears. But, she did do as the lawyer asked and resigned as co-trustee, giving up control completely. This would not. have happened without prior meetings with the lawyer, a trusting relationship between them, and a respectful, unhurried approach by the lawyer. FD was hugely relieved.
Next Protective Steps
FD immediately removed the lackadaisical financial planners and moved all her mom’s seven figure trust funds to her own advisors, who knew AM before AM had left them. Now AM was safe from reckless and unchecked spending. They all worked together to create a generous monthly allowance for AM with a strict limit on it. FD wanted her mom to still enjoy her days but not without controls. She removed all credit cards and replaced them with one debit card: TrueLink, which gave FD control over spending limits and what could be charged. FD cancelled all the many automatically recurring donations, charitable contributions, subscriptions, and other cash drains AM was not aware of and could not remember.
Outcome
This is a success story from real life, based on a typical elder situation where reckless habitual spending and memory loss create financial danger. Even wealthy elders can run out of money when no one is paying attention to what they are doing with their funds every month. So far, AM is in line with the budget. She can still spend with her new debit card, but she gets stopped when the card won’t allow a forbidden debit on the list FD created for the card. AM is not complaining. FD is hugely relieved that she no longer has to fear the prospect of her mom depleting all her assets, leaving FD with a burden to support her mom in the last part of her life. This process took months, but it was successful.
Takeaways
1. If you are an adult child with out-of-control spending by an aging parent, know that you are not helpless in the situation. Possible solutions exist.
2. Seek competent legal advice about the possibility of persuading the elder to give up control over finances. Consider a controlled debit card for your parent.
3. If you are worried about the aging parent running out of money and putting a huge support burden on you later, act now, learn what options exist and avoid a looming crisis. The process can take time, and the effort is worth it.
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